Taiwan's lithium cell maker adjusts capacity after plant fire

Taipei, July 16 (CNA) Molie Quantum Energy Corp. (MQE) announced on Wednesday that after a fire broke out at its lithium-ion battery cell plant in Kaohsiung on Monday, it will adjust production capacity at its Southern Taiwan Science Park (STSP) facility to support high-end product shipments originally handled by the Kaohsiung facility.

The company's battery cell brand, Molicel, supplies premium markets including supercars, aerospace, and AI server data center backup systems (BBUs).

To avoid disrupting supplies to global customers, the STSP facility's three production lines will begin assisting with shipments in August, the company said in a statement.

MQE said in the statement that the fire has largely been extinguished and the company has initiated the process of filing for insurance claims, but details on losses and compensation will depend on assessments by third-party evaluators.

The company is also cooperating fully with the local government investigations and has pledged that employees' salaries will not be affected during the plant's shutdown, according to the statement.

Noting that the Kaohsiung facility had received Q3 and Q4 orders exceeding those of the first half of this year, MQE said that after the fire, most clients expressed strong support and willingness to collaborate with the company through the disruption, with some showing flexibility regarding delivery schedules.

Starting in August, MQE will prioritize fulfilling basic order needs for existing clients from both the Kaohsiung and STSP plants.

However, the company acknowledged it will not be able to fully meet peak order volumes in the short term, and will continue to monitor supply chain conditions to stabilize supplies of critical raw materials and components.

In addition, TCC Group Holdings Co., the parent company of MQE, said in the statement that credit rating agencies S&P Global Ratings, Taiwan Ratings Corp., and Fitch Ratings all released statements on Tuesday and Wednesday, indicating that the fire is not expected to impact TCC's overall credit ratings.

Taiwan Ratings noted that while the potential financial losses from the Kaohsiung battery plant fire were not factored into its baseline scenario, the short-term credit impact is considered limited, partly because insurance is expected to cover a portion of the losses.